7 Mistakes You need to Avoid when Investing in Calgary Real EstateMistake #1: Investing in Calgary without understanding Risk I could never go over all the different risks that an investor faces when buying or selling because in every deal I do there is something new that pops up. Something unexpected, that I need to deal with. Education is probably the number 1 way to protect yourself and this can occur in numerous ways- books, advice from experienced investors, a great lawyer, common sense and so on. Even with all the education in the world you can never foresee every obstacle. That is why you need to be able to think and act without fear or anxiety. A quote I love is "If you need an answer now- it's NO". Simply put, no one forces me to make a decision without fully analyzing a deal and understanding the risk. If I don't know the answer, I find someone that does. #2) Not understanding your target market- looking at houses all over the city trying to find the perfect deal. If you can't look at a house instantly, and tell yourself what it should sell for: on a per square foot (psf), after repair value (ARV), with or without a view, basement suite, garage, etc, then you need to do your research or make sure you have Realtor do it for you.
#3) Using an uneducated Mortgage Brokers and or Realtor. The whole story is a later on this page, but suffice to say that my Buddy (who just got his license), helped me find and renovate my 1st Fixer Upper. VERY Expensive mistake!
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The secret to finding great deals is not to analyze 100 houses a day- it is to sort through them fast with software or a program that spits out only the houses worth looking at. This system is proprietary software, but working with me you will have the benefit of using it (although I cannot share it- sorry I didn't develop it). The other place you can find deals across Canada is on
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#5) Buying a property on EMOTION probably the biggest mistake investors make. With so many mistakes rookie or newbie investors have made in the past year- over paying for properties, buying on emotion, it is no wonder that experienced Investors are destined to make some great buys. Quick Story :After 3 weeks of searching, run down, crap houses all over town, and a frustrating the hell out of my realtor (a good buddy)- I finally found a fixer-upper. I threw in an emotional offer of $180,000 on a 1400sq/ft war-time house in Mount Pleasant (asking price $200,000 and days on market where 2. My realtor didn't want to offend the other realtor with such a low-ball offer- but did so as I instructed. I wanted the house bad, but not bad enough to pay list price, (the first thing I did right!) In about an hour, we had a signed back purchase agreement, with no counter offer. Red flags should be going off- but I was too new and my realtor was thinking of his $5,600 commission cheque to haggle for a lower price. Mistake #6- When negotiating- buying or selling, never take the first offer, even if it is the best one. When you do, the other party will always think they could have done better (as I still do). Long story short- I get into this house with big plans to fix it up and make a quick $50G. Wrong!- I hadn't even considered who was going to buy the house. Mistake #7- Who is your target market- who is going to buy your house and can they afford it? For example- starter families, first time buyers, upper class single men who want to walk to work. With your target Buyer in mind, make sure you only fix the property up to the point where you will get the biggest return! If you renovate the hell out of a pororperty and it doesn't appraise out, and a first time home buyer comes in to buy with 5% down and the lender sends out their own appraiser (more on that another time) and the appraisal comes back too low- you lose the sale. This is where an experienced mortgage broker and realtor can really pays off! 7 weeks later, and $12 grand in reno's on my visa (not to mention clearing out my savings), I was forced to sell. Mistakes to Avoid in CalgaryAny investor who has never made a mistake has not been investing in Calgary long enough, or has never really invested (in my opinion).In every deal I have ever entered into (including ones that I have not entered into)- I learn something. When the learning costs you (time, money or embarrassment) you remember it, and never make that mistake again. If you are an investor or just starting out, you should be prepared to make mistakes. Do not let these hurdles deter you from reaching your goal- in my experience the most successful investors are not the ones that make a few mistakes, they are the ones that crash through hurdles. If you allow every little pitfall to slow or stop you, then you better reconsider investing in real estate. This is not a personal development course, but I thought it was important to emphasize qualities of successful real estate investors. If you have any questions on investing or financing your next purchase in Calgary feel free to email me;
Shane Melanson
P.S: You don't have to worry about me sending you a bunch of garbage- promoting other products or trying to up sell you. I hate when people send it to me, so I wouldn't do that to you. Your email and contact information is protected & will never be sold or given to anyone. Please enter the Password.
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